Heart of the World at greaterfool.ca 8 Jun 2011 9:31pm – “I was talking to a friend today, after a six months hiatus, and heard a great, amazing and very heartwarming story.
I was told that a woman I know who managed a film industry prop house in Vancouver had put her house on the market at 900 large. The house was really nothing much — near the Metrotown Mall in Burnaby, recently repainted but that was about it; a block away from a gas station in a mish-mash neighbourhood… the heartwarming part of this is that this woman is really lovely as a person, and as I remember her from various business dealings, I can tell you that her income was nothing much, and her work was hard, unrewarding, and she did it very, very well, with no complaints.
Anyway, there was a bidding war on her humble abode, and she and hubby came out of the affray with $1.5 mill. — a true lottery win! It is a good thing when those who work hard, and are kind and helpful to others receive this kind of windfall.
So while the economy at large will lose when prices revert to the mean, there have been, here and there, some good results for deserving people.”
Heartwarming? Perhaps.
Remember, however, that for every individual in this situation who is fortunate enough to ‘cash-out’ there is somebody taking the other side of the deal, and for that party the deal will be… what’s the opposite of ‘Heartwarming’?… ‘Soul Destroying’?
A speculator with a large down-payment or paying cash? Perhaps, and, if so, we’d have little sympathy. But, in our market, the buyers are just as likely to be a youngish family who have inappropriately completely overextended themselves into massive mortgage debt to ‘purchase’ this property, and they now carry very substantial risk that their lives will be ruined over the coming 5 – 10 years by being hopelessly overburdened by that debt.
Net gain/loss for the community?
There are very few real silver linings to speculative manias.
And, it goes without saying that people making more from the sales of their houses than a lifetime of savings, and having home sales described as ‘lottery wins’, are evidence of the fact of that mania.
- vreaa
Yeah some people “deserve” it but this type of thinking clouds the water. Morality and bubbles are like oil and water.
Tough call. If I could collect a 1.5 mil windfall I would be pretty happy.
The real problem is the buyer is desperate. A culture which manifests such desperation is flawed-whether its HAM or over leveraged citizens.
so one person’s happiness creates a web site full of misery. Not exactly a fair trade is it?
Rusty with a… with a WILD haymaker swing!
can somebody please translate this gibberish?
Haymaker is a type of inelegant boxing punch usually associated with untrained and ultimately unsuccessful boxers. Usually haymakers don’t land unless the opponent is untrained as well.
hehehe ok what’s an uppercut???
I hate to sound like I support Rusty’s views in any way but the reaction to this windfall represents nothing more than petty jealousy. There is no elegant economic argument to condemn this incredibly shrewd couple. If the market can support this sort of profligate spending, I see no reason why any blame should rest with the seller.
[Nobody is faulting the seller for selling. -ed.]
There’s no blame to the sellers – they are simply funding their retirement. But it’s sad to see a city or buyers get into trouble. As Veera wrote, if the buyer is taking out a Jumbo mortgage, he might be getting into debt slavery. That’s sad.
Not the seller’s fault at all. It’s the bank’s fault for loaning this money & the government’s fault for allowing banks to remove all risk by insuring mortgages. The banksters don’t have any skin in the game at this point, which is messing up fundamentals.
“The banksters don’t have any skin in the game at this point”
I agree this is the major culprit and hopefully one that will be dealt with in the coming quarters.
I commend the shrewd and soulless flipper as much as this couple for their spoils. Well done indeed! In the case of this couple, hopefully the windfall doesn’t change who they are; maybe they can donate it to Habitat for Humanity or spend it on booze. Either way, they will still be people.
folks used to make an “honest” living with real estate. I remember in the 80s when an investor was just someone who bought a home, renovated with their own skill and hard labour, then either rented it to gain more equity or sold it at modest profit. Sadly, it’s impossible to make money doing this these days. A fixer-upper will cost you just as much as a fully renovated home – usually because it’s older and has more appeal than the avg home. Also because there are just too many buyers who want a home to live in…so the investor never has a chance against someone willing to pay a huge premium to buy a home for their family.
[Agreed. This is evidence of how abnormal the market is at present. -ed.]
[expl.del. -ed.] the market in the 80s was [expl.del -ed.]
That’s the first sane thing I’ve read from Rusty…
Agreed. Remember in ’08 when there were acres of lots full of gas-guzzling SUVs just sitting there, nobody wanting to buy them? Are many of the dwellings being built these days going to fall to a similar fate, when people realize managing 3 tenants, the downside to cheaping out on flooring, and living in awkward layouts designed to fit as many bathrooms into a unit as possible, aren’t what people will eventually want?
ok, who hacked rusty’s IP?
Who is this? Is this someone pretending to be Rusty? Because that actually made sense.
I find it hard to believe that the purchaser of this property was anything other than an investor or developer. If a family can make a $1.5 million purchase, they can do better than this neighbourhood!
My tendency is to agree with Jane Connor on this one. Burnaby is starting to see the eastward shift from Vancouver. Investing in Vancouver is next to impossible, as the returns are just near impossible, even for a bullish investor. Burnaby has pockets of potential for developers, especially around Metrotown (The Sovereign, just blocks away from Metropolis/Metrotown sold out in what, 3 days?). Now I don’t know the specifics of this property (not that many care about a balance, investigative approach) but I would assume this is a developer before assuming a family. I just did a quick search and $1.5 Million can still buy you a gorgeous 4,400-5,000 sq.ft. McMansions in various, and nice, parts of Burnaby.
I’m sorry everyone…can’t we all just get along? I’d like to make some friends.
[THIS was the first handle hijack post; NOT from Rusty; Rusty assumed it was from pollyanna and, off he went. It actually originated from a very occasional poster. Note to All: Please quit the handle hijacking; it's distracting. - vreaa (the librarian)]
Hope you enjoy Chinese company and culture! Eventual reality is that you’ll be getting pushed aside in the line up for the cashier at Canadian Tire not understanding a word around you.
sure we can. So long as you don’t mind that I’m a smug prick
[This from Rusty, impersonating Polly. -ed.]
it’s true!